Home sales in Chatham, Bryan and Effingham counties rebounded in October after a September slump. The 388 sales represented a 14 percent leap from September and a 21 percent jump from October 2011. The average price, meanwhile, saw an 8 percent change year over year.

Cash buyers accounted for 31 percent of those purchases, a calendar year high. Most cash buyers are investors looking for foreclosures or other distressed properties, intending to convert those homes into rentals or resell — “flip” — them.

“The investors are still out there searching, and they’re picking up what they can, even at slightly higher prices,” said Ben Bluemle with Seaport Real Estate Group, which specializes in selling repossessed properties. “They understand the banks are still holding back.”

Holders of repossessed properties have been “trickling” those homes onto the market for more than two years, even as the local market has seen marked improvement in sales. The Savannah market is 20 percent off its 2010 lows through the first 10 months of the year.

The low supply has resulted in repossessed properties attracting multiple offers. The trend started in mid-2011 with only the cheapest or most move-in ready properties seeing competition. Today, more than 50 percent of Bluemle’s listings receive several bids.

The local investor activity reflects a national trend. Cash transactions represented 28 percent of September purchases nationwide, according to the National Association of Realtors. The group’s chief economist, Lawrence Yun, is “quite surprised” by the stats given rising prices.

Real estate research firm Zillow found in September foreclosure properties were selling at only an 8 percent discount to markets nationally, down from 24 percent in 2009.

The investor-buying trend is good in the short term, Realtors said, but comes with a significant catch. A high volume of distressed properties, be they listed for sale or part of the so-called “shadow inventory,” weighs on home markets. Recovery is tied to absorption of repossessed homes — the longer it takes to cycle through those properties, the longer it takes for the market to heal.

Yet a continued trickling of repossessed properties and a slow, gradual recovery may be better for the market in the long run, said Realtor Tommy Danos of ERA Southeast Coastal Real Estate.

“As long as prices are stable or seeing a very slow appreciation, I don’t know that we need momentum,” Danos said. “The recovery needs to be slow and methodical. Everybody talks about getting back to where we were, but where we were wasn’t real, wasn’t sustainable.”

Lenders have given Realtors no indication of when more shadow inventory will be released. The big banks are still working on backlogs: Bank of America, for example, recently closed a 60-day foreclosure moratorium.

Bluemle estimates it would take at least a year for the Savannah market to burn through the existing distressed property portfolio.

“We’ve seen prices come back a little bit, but it will level out at some point once that inventory is released,” Bluemle said. “When will it start to happen? I don’t know, but not anytime soon. Not this time of the year or on into the winter.”

LOCAL HOME SALES SNAPSHOT

The Savannah-area housing market (Chatham, Bryan and Effingham counties) enjoyed a strong sale months in October A look at the local market (numbers include residential real estate, including single-family homes, modulars, townhomes and condominiums):